Category: Projects

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Improving the competitiveness of district energy

We have made a quantitative impact assessment related to load distribution for Varmelast. The impact assessment is part of the project Load Distribution based on Contract Prices. The aim of the project is improving the competitiveness of district heating.

Varmelast handles load dispatching of heat production in the greater Copenhagen area. Varmelast is organized as a cooperation between the three largest municipally owned heating companies in the Copenhagen metropolitan area: CTR, VEKS, and HOFOR.

Varmelast has published the EML report on Varmelast.dk.

One fundamental way of improving the competitiveness of district heating is to reform the load distribution system to ensure the lowest possible heating prices. Our analysis focused on the pricing of load distribution, comparing the advantages of different pricing systems.

Comparing load distribution systems

We based the assessment on the model TIMES-Varmelast. TIMES-Varmelast is an optimization model we built and tailored based on the internationally recognized TIMES modelling framework.

In the model, a load distribution system based on the contract prices is tested and compared with the existing system load distribution system based on minimizing the total costs of running the plants (e.g., fuel costs and revenue from the sale of electricity which are not part of the heating contract). 

The analysis examines the total variable heat payment in 2030 under the two load distribution systems.  The purpose was to contribute to understanding how changes in load distribution, and design of future contracts can affect the future heat price and production. Likewise, we also wished to gain insights into how electricity price assumptions and fuel price assumptions can affect future heat prices and production.

The TIMES-Varmelast model

The TIMES-Varmelast model is solved on an hourly level (8760 hours). We equipped it with a detailed representation of the greater Copenhagen district heating area. The model features 98 regions representing relevant district heating supply, transmission, and demand areas.

TIMES-Varmelast was developed from scratch within a few weeks by EML. The successful result has demonstrated the strength and flexibility of the TIMES modelling framework. Furthermore, we confirmed our ability to apply the TIMES framework quickly to any complex energy system case.

Key takeaways

  • Adopting the format of price-based contracts for load distribution results in substantial reductions in the costs and lower prices of district heating compared to cost-based load distribution.
  • Operating the format of price-based contracts for load distribution results in using the cheapest production plant at any given time.
  • Using the format of price-based contracts for load distribution results in considerable change in the district heating production. The impact includes decreased production from thermal plants while production from heat pumps and electric boilers increases.
  • The format of price-based contracts for load distribution is more robust to changes in electricity prices.

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Modelling

We used the TIMES modelling framework to build the TIMES-Varmelast model for load distribution with different pricing systems, hourly time resolution, and detailed representation of the Greater Copenhagen district heating area.

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Scenarios

We developed scenarios comparing price-based contracts for load distribution to the existing load distribution system (based on total costs) and ran sensitivity analyses.

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Reporting

We produced the report “Contract Price-based Load Distribution. Analysis of the economic implication of load distribution based on contract prices.”

Client: Varmelast

Reference: Peter Folke

EML Team: Ida Græsted Jensen, Kristoffer Steen Andersen, Julius Lindberg Steensberg

Duration: June-September, 2024

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Denmark’s Climate Targets 2050

We have supported the Report, Denmark’s Climate Targets 2050, published by the Danish Climate Council in August 2024. The Report contains an analysis of four scenarios for the future of Denmark. The scenarios have been generated using the DK-BioRes model as one of the tools.

Energy Modelling Lab developed the DK-BioRes model in 2021 as a project under the Danish Energy Agency. We have updated the model and integrated new technologies. We have also built up the capacity of the experts of the Danish Climate Council to use the model.

Climate target 110 percent reduction

The analysis of the Report shows that there are different pathways towards reaching a climate target of 110 percent reduction of climate gasses. The analysis designates two strategies for implementing the transition. The designated strategies are intended to illustrate the possibilities and dilemmas of the transition. Subsequently, the analysis highlights the magnitude of the task of the green transition.

The DK-BioRes model enables scenario analyses, which show the impacts of various options for the production of biological resources and mitigation measures of greenhouse gas emissions from land, forests, and agriculture in Denmark. The model calculates in physical units, e.g. tonnes and PJ, while financial conditions are not included. The DK-BioRes model has a representation of Denmark’s entire area divided into agriculture, forest, wetlands, built-up areas, etc.

The report: Danmarks Klimamål 2050

Documentation Report 1 about scenarios, models, and assumptions

Documentation Report 2 about the DK-BioRes model

EML Project Supporting the Danish Climate Council

EML-team: Ida Græsted Jensen and Kenneth Karlsson

Danmarks klimamål i 2050Download

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Viet Nam Energy Outlook Report 2023

Viet Nam Energy Outlook Report 2023 shows that the country is working steadfastly to reach net zero by 2050. Simultaneously, the country faces the challenge of a fast-growing economy and a huge increase in electricity demand.

One of the keys to this successful development is strategic energy planning. Subsequently, the Vietnamese government uses the TIMES-Vietnam energy systems model and the Balmorel-Vietnam for decision-making.

We have supported the development of the TIMES-Vietnam model for almost 10 years through our engagements in the Partnership Programme between Viet Nam and Denmark, headed by the Danish Energy Agency.

Regarding the Outlook Report, we have developed scenarios for the analyses. We have also assisted the Vietnamese authorities in building up their planning capacities. To this end, we have updated the technology catalog. The catalog has been integrated into the TIMES-VNM model. It includes technologies not yet being used in Viet Nam.

Some of the key takeaways of the Viet Nam Energy Outlook Report are

• The green energy transition is cost-efficient for Viet Nam
• A steady increase in renewable energy investments is required from today
• Energy efficiency is a cost-effective option to reach the net-zero target

1._eor-nz_english_june2024_0Download

Duration: March- December 2023

EML Team: Kenneth Karlsson, Ida Græsted Jensen &Till ben Brahim

Client: Danish Energy Agency 

Total budget: DKK 572.288

Reference: Giada Venturini, Danish Energy Agency

Collaborators: Electricity and Renewable Energy Authority (EREA, Vietnam), Hanoi University of Science and Technology, and E4SMA

Model: TIMES-VNM

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Planning the optimal energy island

We have developed an innovative model enabling the planning of an optimal energy island. The model makes it possible to generate scenarios and explore how to plan for the maximum economic returns for investors and developers. By analyzing various scenarios we can assess how differing conditions might affect the island’s operations, capacity, investment, and profitability.

Correspondingly, the model can generate scenarios showing the optimal scale of production of various e-fuels such as hydrogen, ammonia, methanol, and kerosene. Likewise, we can probe the most cost-efficient solutions for the management of electricity transmission.

The model is the result of a master’s thesis that we have supervised. It’s developed using the TIMES modelling framework and diverges from the prevalent demand-driven approach by adopting a price-driven strategy.

North Sea Energy Island

As a case study, the master’s thesis explores the strategic development and optimization of a North Sea Energy Island. The Danish government is planning for several energy islands in the North Sea. The Energy Island project directly addresses the European Union’s imperative to boost energy security and diminish its dependence on
fossil fuel imports amidst evolving geopolitical and energy market dynamics.

The model employs an hourly resolution. It thus provides a detailed understanding of the island’s configuration and operations, enhancing the reliability of the results.

The developed model tool has proven reliable although some simplifications concerning the electricity market and transport operations were necessary. It can be integrated with other demand-driven studies to determine optimal operational strategies and future projections.

Results

The findings indicate that Germany and Denmark are the most viable markets for exporting the island’s electricity. However, producing hydrogen for export to the Netherlands and Belgium appears to be the most lucrative option, given the high industrial demand and pricing in these regions.

The study also notes that producing other e-fuels on the island would be economically feasible only under specific conditions with sufficiently high prices. These results suggest that the island’s most effective role may be as a hydrogen hub.

Furthermore, using an hourly resolution has proven instrumental in understanding storage operations on the island and achieving more dependable outcomes.

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Modelling

We have developed a model of a North Sea energy island using the TIMES modelling framework.

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Scenarios

We have generated various scenarios and assessed how differing conditions might affect the island’s operations, capacity, investment, and profitability.

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Publication

The research is part of a master’s thesis at Danish Technical University.

Institution: Danish Technical University, supervisor Kenneth Karlsson

MSc student: Francisco González Beltrán

EML-team:  Kenneth Karlsson, and Till ben Brahim

Duration: 2023-2024

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Phasing out the Use of Biomass

The Danish District Heating Association has assigned us to analyze the impact of phasing out the use of biomass in district heating. We have explored three scenarios of phasing out, all by 2035. In the first scenario, a 50 percent reduction is implemented. In the second scenario, a 75 percent reduction is implemented. In the third scenario, the phasing out of the use of biomass is 100 percent complete.

The use of biomass is set to be replaced by heat pumps and electric boilers, fueled by electricity from solar and wind parks. Consequently, the electricity demand is set to increase. Simultaneously, the electricity production from the thermal plants is set to decrease. Therefore, the capacity of onshore wind and solar parks needs to increase correspondingly.

Our analysis focuses on answering three questions:

1. How big is the need for new capacities of heat pumps, electric boilers, and onshore wind and solar parks?

2. How big are the changes in yearly costs and what are the investment and sunk costs for the phase-out?

3. What will the phasing out mean for land use?

Cost-benefit

A key factor is the replacement of costly biomass with sun and wind. Also, the life expectancy of the technologies has an important impact on the results. Solar and wind parks have a life expectancy of 35 years while thermal plants have 25 years. Boilers and heat pumps have a life expectancy of 20 years.

Meanwhile, the electricity production of solar and wind parks is less efficient. Consequently, the capacity needs to be higher than the capacity of thermal plants. Yet, the operational costs of solar and wind parks, boilers, and heat pumps are significantly lower than those of thermal plants.

The land use differs considerably. Phasing out the use of biomass could lead to a reduction of more than 90 pct. Land prices thus have a considerable impact on the bottom line.

Client: Danish District Heating

EML Team: Ida Græsted Jensen, Julius Lindberg Steensberg

Duration: April-June, 2024

Budget: DKK 126,000

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Modelling the Water-energy-food Nexus

photo of a sunflower field by small river

We are hosting and supervising PhD student Daniele Mosso for one year. Daniele Mosso is doing his PhD at Politecnico di Torino. He is focusing on developing tools to modelling the water-energy-food nexus. The objective is to answer the following question: To what extent can energy be produced without significantly harming natural resources and related sectors?

Daniele Mosso spent the initial period of his PhD examining the major factors affecting the sustainability of energy systems. He concluded that land use, or the consumption of natural resources, is a major issue.

Limitations of existing models

Meanwhile, the existing Energy System Optimization Models (ESOMs) have limitations concerning sustainability and environmental aspects. The limitations can be overcome in several ways. Based on his initial research, Daniele Mosso opted to develop a tool to represent the sectors of agriculture, forestry, and land use (AFOLU) in an ESOM. The tool should make it possible to account for land and water consumption and related emissions.

Subsequently, the research of Daniele Mosso is in line with a new research project Energy Modelling Lab launched recently. The aim is to develop a prototype module representing the AFOLU sector for the TIMES modelling framework. The TIMES model is an energy system optimization model.

Exploring a soft-linking methodology

Furthermore, Daniele Mosso plans to devote the last part of his PhD to exploring a soft-linking methodology. One possibility is direct coupling with an integrated assessment model (IAM) representing natural resources.

At Politecnico di Torino, Daniele Mosso is a member of the MAHTEP Group (Modeling of Advanced Heat Transfer and Energy Problems). It’s a research team established at the end of 2019.

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Modelling

We will develop a prototype module representing the AFOLU sector for the TIMES modelling framework.

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Scenarios

We will test scenarios of the impacts of energy consumption of the AFOLU sector.

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Publication

The research is part of a PhD to be finalized in 2026.

Institution: Politecnico di Torino, Professor Laura Savoldi

EML-team: Daniele Mosso, Ida Græsted Jensen

Duration: 2024-2025

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Financing district heating projects

We have launched a research project on the challenges of financing district heating projects. The overall objective is the development of sustainable financial frameworks for key district heating market types. Our focus is analyzing fundamental structures within district heating finance. One major result will be identifying best practices.

The project will provide authorities, investors, and the scientific community with fundamental insight into sustainable finance’s role in district heating deployment. District heating is key to the green energy transition in the EU. Since the sector is set to grow so is the need for financing.

The research project is entitled “Financial Frameworks’ Impact on District Heating”. We are implementing it as a party to a four-country consortium (Belgium, Denmark, Germany, and Sweden).

Challenges to district heating

District heating is a cost-effective and sustainable technology. Nonetheless, financing challenges pose a serious impediment to new projects. District heating projects are typically large-scale and require significant upfront investment. Therefore, it’s a difficult task to secure financing, particularly from the private sector.

Mainstream financing mechanisms to attract private capital are usually ill-suited for district heating. Subsequently, the development of district heating has historically relied heavily on public financing, such as grants, loans, and guarantees. In particular, this is the case in countries with a strong tradition of public ownership and control of energy infrastructure.

Objectives

1. To understand and define district heating as an asset class. We will classify the various investment components into an asset class structure according to the standards in the investor community. Investors tend to hold portfolios of assets of varying character. Identifying the asset class of district heating allows investors to lower the threshold for investing in it.  

2. To establish a database of key financial characteristics.

3. To understand the impacts of financial frameworks on the deployment of district heating.

4. To provide recommendations on how investors in green energy can approach the district heating sector.

Donor:  IEA Technology Collaboration Programme on District Heating and Cooling 

Coordinator: Daniel Møller Sneum

Partners: Lund University and Halmstad University, Sweden, Stuttgart University of Applied Sciences, Germany, and Euroheat & Power, Belgium.

Lead: Energy Modelling Lab

Budget: USD 302,425

Duration: 2024-2026

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Low Carbon Solutions for Azerbaijan

We are contributing to a project designating low-carbon solutions for Azerbaijan. The project result should be a Roadmap recommending relevant policies and technologies. The full title is “Low-Carbon Solutions in the Electric Power Sector of Azerbaijan Technical Assistance Project”.

Azerbaijan relies heavily on oil and gas, which has brought significant economic growth over the years. Oil, gas, and related petroleum products accounted for 91 percent of Azerbaijan’s total exports in 2022 and almost 48 percent of its GDP.  Likewise, in 2021, natural gas dominated the electricity generation mix (94 percent). It was followed by hydropower (4.6 percent), waste and biomass incineration (0.7 percent), and solar and wind (0.5 percent).

Meanwhile, there is a vast potential for solar and wind power that investors have already begun to develop.

TIMES-Azerbaijan

Energy Modelling Lab carries out part of the energy systems modelling work for the project. Subsequently, we are updating and tailoring the TIMES-Azerbaijan model we have developed for the EU Commission in 2021. We are using the model to create three scenarios:

  • A Business As Usual (BAU) scenario reflects current and planned policies concerning low carbon penetration.
  • One scenario assumes high economic growth and targets carbon neutrality by 2050.
  • One scenario assumes low economic growth and targets carbon neutrality by 2050.

Stakeholder engagement

We have also been assigned to design and take charge of stakeholder engagement, consultation, and communications. The aim is to foster an understanding of the modelling approaches. The key stakeholders should reach and maintain agreement on scenario assumptions, and we should obtain the necessary feedback. The overall objective is to ensure the full capacity of ownership of the key stakeholders. Additionally, the Roadmap should be credible, robust, and functional.


Energy Modelling Lab has been subcontracted for the project by Tetra Tech. The project is implemented within the Memorandum of Understanding between the Ministry of Energy of Azerbaijan and the European Bank for Reconstruction and Development EBRD on technical support related to the development of the electric power sector of the Republic of Azerbaijan.

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Modelling

We are updating and tailoring the TIMES-Azerbaijan model using the TIMES energy systems modelling framework.

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Scenarios

We are creating a business as usual (BAU) scenario and two scenarios targeting net zero for the energy sector by 2050.

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Stakeholder engagement

We are taking charge of designing the consultation and communications to ensure the full ownership of key stakeholders.

Client: Tetra Tech

Donor: European Bank of Reconstruction and Development (EBRD)

EML Team: Kenneth Karlsson, Till ben Brahim, Andrea Radoszynski, Pernille Bramming

Duration: 2024-25

Budget: EURO 52,400

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Developing scenarios for CONCITO

We have contributed to developing scenarios for CONCITO, a major Danish green think tank. CONCITO has analyzed the scenarios in the report The Importance of Agriculture for Future Land Use (Jordbrugets Betydning for Fremtidens Arealanvendelse), published in May 2024.

The scenarios represent different visions of land use in Denmark. The scenarios consider major concerns regarding sustainability, climate neutrality, and natural resources. 

Consequently, the scenarios explore the potential of a substantial increase in plant-based food production and a corresponding livestock decrease. The impact of such measures on the economy and the well-being of the Danish population has also been explored. 

The set target for the scenarios is to keep contributing to global food production on the present scale. The set target amounts to producing about 22 trillion kilojoules, feeding about 22 million people by 2050. 

Bio-Resources of Denmark 

We used the model for Denmark’s bioresources, DK-BioRes. Energy Modelling Lab developed this model for the Danish Energy Agency in 2021. We have updated and tailored the model to meet the needs of CONCITO. The model contains data on Denmark’s bioresources, i.e., agricultural land, forests, natural areas, and aquaculture. 

The model and the data sources used are available on GitHub. 

Based on the input on crop distribution, livestock, land distribution, and desired applied technologies that the model receives, it can analyze how biomass flows through a network of processes. The results include the final production, land use, and greenhouse gas emissions. 

Potential pathways 

The model can generate scenarios showing the pathway to a specific target. For the CONCITO scenarios, the set target is that the Danish agricultural sector keeps contributing to global food production on the present scale relative to the global population growth.

The scenarios generated show which kind and quantities of crops and livestock production could meet the target. They also show the land use needed. The non-edible bi-products such as straw are also included in the calculations of final material production. 

In general, the focus of CONCITO in transforming the food system is to ensure sufficient healthy food in the least space possible with the least greenhouse gas emissions and negative impact on nature, the environment, and animal welfare. 

During 2024, CONCITO is running the project Rethink Denmark with a special focus on land use.

Open-access model 

The DK-BioRes model was developed under the program of the Bioenergy Taskforce. The model is calibrated to use 2019 as the base year. The data used are from Statistics Denmark. For the CONCITO scenarios, data on calories for edible products have been added to the model. 

The DK-BioRes is built in Excel and is an open-access and open-source model. The model and the data sources used are available on GitHub. 

Energy Model Lab has also developed a new and updated version of the DK-BioRes model, tailored to meet requirements from the Climate Council. We handed the model over to the Climate Council in March 2024. 

Overview of the DK-BioRes model:

 

Documentation report

The documentation report on the scenarios, “The Danish Bio Ressource”, is available in Danish only.

DEN DANSKE BIORESSOURCEDownload

Client: CONCITO 

Budget: DKK 160.000,00 

EML-team: Ida Græsted 

Duration: Spring 2024 

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Hydrogen fuel cells in shipping

It’s necessary to ban the use of fossil fuels to complete the green transition in shipping. To put it short, this is the main finding of our research study: “Hydrogen fuel cells in shipping: A policy case study of Denmark, Norway, and Sweden”. The study resulted from a collaboration with colleagues in Iceland. It was published in the leading journal Marine Policy (May 2024).

The study aims to identify the policy instruments needed to accelerate the uptake of hydrogen fuel cells for the shipping industries in Denmark, Norway, and Sweden.

Hydrogen fuel cells are promising for reducing emissions from shipping. However, their adoption is limited by high costs, lack of regulations, and lack of infrastructure. This is why there is a need for policies that spur investments in hydrogen fuel cells.

The three policy packages

Together with our fellow researchers, we tested three policy packages with different degrees of ambition (low, medium, and high). Our findings indicated that the proposed taxes on CO2 emissions and fossil fuels can help drive the transition away from fossil fuels. Meanwhile, the complete transition requires a ban on the use of fossil fuels.

The three policy packages were formulated based on discussions during workshops with key stakeholders from Nordic Shipping. During the workshops, we also learned that the participants are paying high attention to a “chicken and egg” paradox: Without the demand for green hydrogen, no supply, and vice versa. This has not been reflected in previous studies.

Correspondingly, a coordinated regional approach and cross-sector and cross-industry collaboration are needed. Otherwise, we cannot overcome the paradox and help balance the supply and demand for Nordic shipping

Modelling

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MODEL

We used the TIMES-NEU model, an economic model generator for energy systems, to evaluate the three different policy packages. EML has developed the TIMES-NEU model.

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SCENARIOS

Estimated total fuel consumption in PJ/year; CO2 emissions by fuel in thousand tons of CO2 emissions/year; revenue from the tax on fossil fuels in million Euros/year; ferry segment fuel consumption in PJ/year.

RESULTS

The main finding was that policies are needed to spur investments. Meanwhile, it’s necessary to ban fossil fuels to complete the green transition of shipping.

Other scenarios included in the study show estimated CAPEX and OPEX in million Euros/year, estimated CAPEX and OPEX for the ferry segment in million, and estimated CAPEX and OPEX of the mandate of ferries to use hydrogen in comparison to the policy packages in million Euros/year.

The research study is part of the HOPE Project: The authors of the article are:
Mauricio Latapí, Brynhildur Davidsdottir, David Cook, Lara Johannsdottir, MBA, Ph.D., Andrea Marin Radoszynski, and Kenneth Karlsson.

We are grateful for the financial support towards the HOPE project provided by the following organizations: the Nordic Energy Research, the Norwegian Research Council, the Swedish Transport Administration, the Icelandic Centre for Research, Business Finland, the Danish Energy Agency, Stena Rederi AB, and PowerCell Sweden AB.

EML Team: Andrea Marin Radoszynski and Kenneth Karlsson